US domestic hot dip galvanized (HDG) prices have remained stable since last week, while import HDG prices have inched down as the price gap between Chinese and Indian offers narrowed.
After rising by about $1.00 cwt. ($22/mt or $20/nt) since last week following several US flat rolled mills' November/December price announcements, domestic HDG prices have remained unchanged since last week. Still, the overall pricing trend for US domestic HDG remains slightly up as mills still have the upper hand on pricing given the tight service center inventories and lack of import penetration to the market, and are still trying to push up their prices above the current level. For now, US HDG base prices remain at a range of $33.00 cwt. to $35.00 cwt. ($728/mt to $772/mt or $660/nt to $700/nt), which is up by about $1.00 cwt. ($22/mt or $20/nt) from October offers. Comparing the current spot price range to mills' desired price levels, SteelOrbis notes that AK Steel is trying to raise HDG base prices to $40.00 cwt. ($882/mt or $800/nt) in December, while US Steel announced a $36.00 cwt. ($794/mt or $720/nt) HDG base price for November/December.
Domestic spot offers for the most popular US-produced HDG item, 0.019” x 48” G90 (0.48 mm x 1.219 m) remain at a range of $44.00 cwt. to $46.00 cwt. ($970/mt to $1,014/mt or $880/nt to $920/nt) ex-Midwest mills. Domestic offering prices for this item are up by about $2.00 cwt. ($44/mt or $40/nt) from the October price range quoted about a month ago. For the more the more expensive, lighter gauge HDG item, 0.012” x 40.875” G30 (0.30 mm x 1.04 m), current domestic offers range from approximately $48.00 cwt. to $50.00 cwt. ($1,058/mt to $1,102/mt or $960/nt to $1,000/nt) ex-mill, Midwest. These offers have risen by a steeper $4.00 cwt. ($88/mt or $80/nt) within the last month. Domestic offers of Galvalume 0.019” x 41.5625” Gr.80/AZ55– aluminum and zinc alloy-coated zinc – are up $3.00 cwt. ($66/mt or $60/nt) from last month, with most offers currently ranging from $45.00 cwt. to $47.00 cwt. ($992/mt to $1,036/mt or $900/nt to $940/nt) ex-mill, Midwest. All of these ranges are unchanged from last week, however.
While the US HDG market is still trending slightly up, there are some who question how long this trend will last, given the decent but not stellar end-use demand, and the continued weakness in the hot rolled coil (HRC) market. Domestic HRC pricing seems to have stalled and if pricing starts to retreat, it is unlikely that CRC and HDG will be able to maintain their recent rally. For now, HDG demand is still driven by automotive and inventory replenishment on the service center level. Also, September/October are peak months for the HVAC market, which is also a big consumer of galvanized sheet. Nevertheless, HDG suppliers say there is a definite weakness showing up in commercial construction as order back logs start to dry up. If this weakness continues it could have a big negative impact on the metal building industry, which could also affect HDG adversely, especially if other sectors like automotive start to soften again.
On the import side, the weakness of China's HDG market hasn't started to improve yet, although HDG imports in general are not expected to have a major detrimental effect on the US domestic market this year. Traders say that while just about everyone has some Chinese galvanized, import HDG offers in general are still only workable for niche items. Given the uncertainty in the market, a $40/ton discount over domestic product is just not attractive enough for most buyers to consider buying import. Furthermore, dumping is still coming up in discussion and domestic producers are watching import tonnage, particularly from China and other Asian sources, very closely. For these reasons, HDG imports are expected to remain, for all intents and purposes, a non-issue for the US HDG market for at least the duration of the year.
Indian HDG offers for the US have come down by about $1.00 cwt. since last week, as the price gap between Indian and Chinese offers was getting too large to make any sense following China's significant price decreases in prior weeks. Still, Indian HDG offers to the US remain at least $2.00 cwt. than Chinese offers on most items.
Besides Indian offers coming down $1.00 cwt., most import HDG offers for the US have remained unchanged since last week. Import Chinese offers of 0.019” G90 range from approximately $41.00 cwt. to $43.00 cwt. ($904/mt to $948/mt or $820/nt to $860/nt) duty-paid, FOB loaded truck in US Gulf ports. Chinese offers of 0.012” G30 are also offered at the same range.
Indian 0.019” G90 offers for the US currently range from approximately $42.50 cwt. to $43.50 cwt. ($937/mt to $959/mt or $850/nt to $870/nt) duty-paid, FOB loaded truck in US Gulf ports, while Taiwanese offers of the same material range from $43.00 cwt. to $44.00 cwt. ($948/mt to $970/mt or $860/nt to $880/nt) duty-paid, loaded truck in US Gulf ports.
Offers of 0.012” G30 from India now range from $43.50 cwt. to $44.50 cwt. ($959/mt to $981/mt or $870/nt to $890/nt) while Taiwanese offers of the same material are about $1.50 cwt. ($11/mt or $10/nt) higher (both are duty-paid, FOB loaded truck in US Gulf ports.)
On the Galvalume end, there are currently import offerings for the US of 0.019” AZ55 from Taiwan, India and China. Taiwanese offers range from $45.00 cwt. to $46.00 cwt. ($992/mt to $1,014/mt or $900/nt to $920/nt) duty-paid, FOB loaded truck in US Gulf ports, while Chinese and Indian offers are about $1.00 cwt. less (also FOB loaded truck, Gulf).